7 Banks Closed Before Holiday Weekend

The seven failed institutions include: Founders Bank, Worth, IL.; Millennium State Bank of Texas, Dallas, TX; The First National Bank of Danville, Danville, IL.; The Elizabeth State Bank, Elizabeth, IL.; Rock River Bank, Oregon, IL.; The First State Bank of Winchester, Winchester, IL.; The John Warner Bank, Clinton, IL.

According to the Federal Deposit Insurance Corporation (FDIC), which oversaw the closures, the six IL bank failures were no coincidence. "The six failed Illinois banks are all controlled by one family and followed a similar business model that created concentrated exposure in each institution," the FDIC said in news releases about the closures. "The failure of these banks resulted primarily from losses related to the banks' investment in collateralized debt obligations and other loan losses."

In all, 52 banks and five credit unions have failed so far in 2009, as compared to 40 failed institutions in all of 2008.

Details on each of the latest closures below.

The John Warner Bank
The John Warner Bank, Clinton, Illinois, was closed by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Lincoln, Lincoln, Illinois, to assume all of the deposits of The John Warner Bank.

The three offices of The John Warner Bank were to reopen on Friday as branches of State Bank of Lincoln. Depositors of The John Warner Bank will automatically become depositors of State Bank of Lincoln.

As of April 30, 2009, The John Warner Bank had total assets of $70 million and total deposits of approximately $64 million. State Bank of Lincoln paid a premium of 4.1 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, State Bank of Lincoln agreed to purchase approximately $63 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $10 million.

The First State Bank of Winchester
The First State Bank of Winchester, Winchester, Illinois, was closed July 2 by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The First National Bank of Beardstown, Beardstown, Illinois, to assume all of the deposits of The First State Bank of Winchester.

The two offices of The First State Bank of Winchester will reopen on Monday as branches of The First National Bank of Beardstown. Depositors of The First State Bank of Winchester will automatically become depositors of The First National Bank of Beardstown.

As of April 30, 2009, The First State Bank of Winchester had total assets of $36 million and total deposits of approximately $34 million. The First National Bank of Beardstown paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The First National Bank of Beardstown agreed to purchase approximately $33 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $6 million.

Millennium State Bank of Texas
Millennium State Bank of Texas, Dallas, Texas, was closed July 2 by the Texas Department of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with State Bank of Texas, Irving, Texas, to assume all of the deposits of Millennium State Bank of Texas.

In observance of the 4th of July holiday, the sole office of Millennium State Bank of Texas will reopen on Monday as a branch of State Bank of Texas. Depositors of Millennium State Bank of Texas will automatically become depositors of State Bank of Texas.

As of June 30, 2009, Millennium State Bank of Texas had total assets of approximately $118 million and total deposits of $115 million. State Bank of Texas agreed to purchase essentially all of the failed banks assets.

The FDIC estimates that the cost to the Deposit Insurance Fund will be $47 million.

The First National Bank of Danville
The First National Bank of Danville, Danville, Illinois, was closed July 2 by the Office of the Comptroller of the Currency, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with First Financial Bank, N.A., Terre Haute, Indiana, to assume all of the deposits of The First National Bank of Danville.

The seven offices of The First National Bank of Danville will reopen on Monday as branches of First Financial Bank, N.A. Depositors of The First National Bank of Danville will automatically become depositors of First Financial Bank, N.A.

As of April 30, 2009, The First National Bank of Danville had total assets of $166 million and total deposits of approximately $147 million. First Financial Bank, N.A. paid a premium of 5.36 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, First Financial Bank, N.A. agreed to purchase approximately $148 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $24 million.

The Elizabeth State Bank
The Elizabeth State Bank, Elizabeth, Illinois, was closed July 2 by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with Galena State Bank and Trust, Galena, Illinois, to assume all of the deposits of The Elizabeth State Bank.

The two offices of The Elizabeth State Bank will reopen on Monday as branches of Galena State Bank and Trust. Depositors of The Elizabeth State Bank will automatically become depositors of Galena State Bank and Trust.

As of April 30, 3009, The Elizabeth State Bank had total assets of $55.5 million and total deposits of approximately $50.4 million. Galena State Bank and Trust paid a premium of 1.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, Galena State Bank and Trust agreed to purchase approximately $52.3 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $11.2 million.

Founders Bank
Founders Bank, Worth, Illinois, was closed July 2 by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The PrivateBank and Trust Company, Chicago, Illinois, to assume all of the deposits of Founders Bank.

The eleven offices of Founders Bank will reopen on Monday as branches of The PrivateBank and Trust Company. Depositors of Founders Bank will automatically become depositors of The PrivateBank and Trust Company.

As of April 30, 2009, Founders Bank had total assets of $962.5 million and total deposits of approximately $848.9 million. The PrivateBank and Trust Company paid a premium of 1.5 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The PrivateBank and Trust Company agreed to purchase approximately $888.4 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $188.5 million.

Rock River Bank
Rock River Bank, Oregon, Illinois, was closed July 2 by the Illinois Department of Financial and Professional Regulation, Division of Banking, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. To protect the depositors, the FDIC entered into a purchase and assumption agreement with The Harvard State Bank, Harvard, Illinois, to assume all of the deposits of Rock River Bank.

The four offices of Rock River Bank will reopen on Monday as branches of The Harvard State Bank. Depositors of Rock River Bank will automatically become depositors of The Harvard State Bank.

As of April 30, 2009, Rock River Bank had total assets of $77 million and total deposits of approximately $75.8 million. The Harvard State Bank paid a premium of 2.0 percent to acquire all of the deposits of the failed bank. In addition to assuming all of the deposits of the failed bank, The Harvard State Bank agreed to purchase approximately $72.9 million of assets. The FDIC will retain the remaining assets for later disposition.

The FDIC estimates that the cost to the Deposit Insurance Fund (DIF) will be $27.6 million.